Chapter 4. Case Study of Croatia
4.3 EU Conditionality, Anti-Corruption Efforts, and Croatia’s Accession to the EU
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Later on, a bribe of 5 million euros made it possible for Hungarian energy firm to control Croatia’s state-owned oil company. Moreover, media reported that Sanader had been
collecting watches, owned expensive villa and custom-made tuxedos valued around 150,000 euro (Kuris 2015b).
Croatians started to initiate investigations of second-tier officials in 2006, ensuing on the investigations of top-tier officials; in 2009, Sanader resigned from all public posts under pressure of corruption allegations and was arrested later on. This event opened way for a series of other notable arrests such as the deputy prime minister, two ministers and treasurer of the HDZ party, and several directors of state-owned enterprises (Elbasani and Šabić 2018).
Thereafter, in 2012, a sentence of 10 years and return of half million euros was issued for Sanader. Two years later he was sentenced for additional 9 years and to was forced to return two million euros for being involved in another case of embezzlement of public funds, in case known as HYPO Bank. Planinska and TLM-HEP trails in 2016 implicated that Sander embezzled assets worth around 90 million euros. The court proceedings also found the HDZ party guilty and confiscated 29 million kuna worth of assets that were illegally acquired (Radosavljevic 2014). The trail of Sander for corruption charges that dated back to the Tudjman era marked a crucial change in Croatia’s efforts to fight corruption in high-level.
4.3 EU Conditionality, Anti-Corruption Efforts, and Croatia’s Accession to the EU
Minister of Justice in May 2008 announced the new Anti-Corruption Strategy, the strategy gave more emphasis on combating corruption in high-level places rather than the low-level, especially based on the pressure from EU for Croatia to tackle corruption on high-profile cases. Combating corruption in Croatia was considered as required condition for EU accession. Corruption became an emphasized topic in Croatia since the mid-90s, but its importance started to be more stressed since 2000 due to EU conditions and expectations for accession negotiations (Čaldarović et al. 2009, 18). Croatia gained the candidate status in 2005 for EU membership and was set to fulfill addition Copenhagen criteria for political, economic and legal aspects. EU and Croatia signed Stabilization and Association Agreement in 2001, which among other generated additional benchmarks for fighting corruption and demand for anti-corruption program and strategy as precondition for accession. This pressure
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from EU came as a result of Croatia being considered a country with high systemic corruption problems (Grubiša 2010, 75).
A new third generation conditionality principles for the EU accession was created from the long-lasting negotiations with Croatia, these principles referred to as benchmarks, and will potentially play instructive role on the accession of the other countries in Western Balkans (Albania, Bosnia and Herzegovina, , Kosovo, Montenegro, North Macedonia and Serbia).
Grubiša (2010, 91) argues that the experience of Croatia on the EU accession process serves as case that fight against corruption is now ranked high on the priority list of EU to consider membership for the Western Balkan countries that aspire to become members of the union.
In order to achieve membership to the EU, countries negotiate closing of negotiation chapters, and Croatia received 33 negotiation chapters, four more than previous accessed countries of Central and Eastern Europe. The additional chapters focused on market
competition, foreign policy and judiciary; the latter was a crucial chapter considering that it contained the fight against corruption. Moreover, the launch of anti-corruption program and strategy were part of the benchmarks for opening the negotiations in terms of judiciary. In the case of Croatia, the European Commission through intergovernmental negotiation team decided to go for systemic approach on political corruption. Among the 21 benchmarks that showed political corruption problem to be tackled in Croatia include measures in ensuring capacities for conduction judicial reform, reforming and strengthening the State Judicial Council and the State Prosecutorial Council, strengthening USKOK and expanding its powers, increasing capacity of courts, increasing transparency and integrity of public administration, improving regulations on political party financing, and controlling assets cards of public officials and judges (Grubiša 2010, 92).
EU negotiation of 2004 for Croatia had foreseen the new Chapter 23 related to the rule of law. Opening benchmarks for Chapter 23 in 2010 asked for the Croatian authorities to create action plans that would close the benchmarks and demonstrate a track record to implement those prepared plans. Closing benchmark 5 required that Croatia should demonstrate unbiased investigation and prosecution in cases of corruption of all levels. Even after the negotiations finished in 2011, EU set up a monitoring mechanism to assess the reforms until Croatia eventually becomes a member of EU in 2013 (Elbasani and Šabić 2018).
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The adaptation of the law related to financing of political parties gave Croatia another praise from the European Commission, since it was considered as an significant step to be taken related to the transparency in fighting corruption. Furthermore, the Commission noted that proper implantation should be done regarding respect of financing election campaigns and breaches to be sanctioned where detected (European Commission 2007, 7). The anti-corruption program of 2006-2008 was implemented and seen as initial result for fighting corruption. Moreover, the legal framework was improved and the Office for Fight against Corruption and Organized Crime (USKOK) had become effective and started to tackle some major cases of corruption (European Commission 2007, 10).
The progress report of 2007 further suggested that Croatia needed to take more effective measures since the were no indictment or verdicts concerning the high-level corruption cases.
The Commission noted that the law on conflict of interest is ambiguous and the anti-corruption program needed to strengthen its coordination for efficient non-partisan
monitoring (European Commission 2007, 10). Among other improvements detected by the European Commission, were the amendments to the law on USKOK were adopted in July 2007, that saw its mandate covering the abuse of public office, and the obligation of submitting assets declarations for all judges and State Prosecutors (European Commission 2007, 50) .Moreover, the number of cases prosecuted by USKOK increased substantially from previous year, only 71 cases in 2005 to 156 in 2006. It was noted that USKOK was worked in the investigation of major cases of corruption; the office launched the first case of abuse of public office, and the known case of “operation Maestro” in June 2007, saw arrested 8 senior official of the Croatian Privatization Fund (European Commission 2007, 50).
In the 2008 Progress Report, European Commission noted that the legal framework to fight corruption had been improved, and the revised Anti-Corruption Strategy with Action Plan adopted in June 2008, contained specific measures in several fields regarding corruption. An inter-ministerial coordination system to observe anti-corruption efforts was set, and USKOK continued its efforts by issuing indictments in major corruption cases, especially in regards of abuse of public office cases (European Commission 2008, 9). The shortcomings noted in the same report suggested that the administrative capacity was insufficient, lack of progress in preventing conflict of interest, and despite the improved number of investigated cases of corruption, the number of prosecuted cases remained low (European Commission 2008, 53).
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The 2009 Progress Report noted the improvement of the legal framework in fighting
corruption, in particular the armaments to Criminal Code regarding the rules of confiscation of assets, that would reverse the burden of proof for convicted violators involved in organized crime and/or corruption. Moreover, the National Council for monitoring the anti-corruption strategy became more proactive. It held several public debates and hearings and a campaign for anti-corruption was launched for the public (European Commission 2009, 10). The National Police Office for the Fight Against Corruption and Organized Crime (PNUSKOK) started to operate within the General Police Directorate in February 2009.
The 2009 report also noted that USKOK continued to improve its commitment by indicting important cases and investigation possible high-level corruption cases; it investigated the former government minister. In the second trail of the “Maestro”, prison sentences were issued to two vice-presidents of the Croatia Privatization Fund by the Zagreb County Court (European Commission 2009, 53). Among shortcomings noted on the 2009 Progress Report, European Commission stated that there was limited investigation on cases of high-level corruption and prosecution was hindered by political influence. There was still no
improvement on preventing conflict of interest despite re-establishing The Committee for the Prevention of Conflicts of Interest (CPCI). European Commission further recommended that USKOK and PNUSKOK needed to improve their expertise on financial issues and enhance their cooperation and the law on access to information needed to be implemented (European Commission 2009, 54).
In 2010 the adoption of specific anti-corruption strategy on state-owned companies was identified as an improvement by the European Commission. Despite the lack of additional sources, USKOK continued to be active and the number of cases handled increased. USKOK investigated high-level corruption cases and started prosecutions including state-owned companies. On a positive note, the number of court verdicts increased, and the first high-level corruption cases were put to courts. Moreover, the Office of the Commission for the
Prevention of Conflicts of Interest was restructured in order to give the commission more independence from the Parliament and legal provisions were introduced to depoliticize appointments for supervisory boards of state-owned enterprises (European Commission 2010, 9). Shortcomings reported in the Progress Report 2010 noted that there was insufficient scrutiny of transparency in public procurement contracts. Overall, the progress in fighting corruption noted to be improved compared to previous years (European Commission 2010,
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10). Progress Report 2011 showed further progress on Croatia’s fight against corruption. It noted that Croatia had increased transparency in the area of public administration and companies owned by the state. Moreover, the law on access of information had been amended and clearer procedures for requesting information were introduced (European Commission 2011, 7).
Croatia adopted a new law on the financing of political activities and election campaigns which improved transparency and increased penalties on breaching the law. Conflict of Interest Act underwent changes that offered depolarization for appoints to the supervisory boards of state-owned enterprises. Moreover, sanctions for conflict of interest cases were strengthened and measures to raise awareness on conflict of interests were taken (European Commission 2011, 7). European Commission reported changes made on the Labour Act that would strengthen the protection of whistleblowers, but for this act and for the law on access information the Commission noted that effective implementation was required. Among other recommendations from the Commission were the strengthening of the State Electoral
Commission that supervises and controls the political parties and election campaigns financing by implementing the new legislation (European Commission 2011, 7-8).
In regards of USKOK the report noted that operational capacities for fighting corruption had been reinforced and PNUSKOK was fully staffed compared to previous shortages. Moreover, the cooperation from the two agencies had been improved through the memoranda of
understanding which further improved financial expertise as well (European Commission 2011, 8). Croatia adopted the new Police Act in March 2011, the act aimed to make the police service more professional by taking depoliticizing measures. In terms of mid and high levels of corruption cases there were serval cases under investigation and indictments were issued including a former Prime Minister, and court rulings in other high-profile cases that involved the Deputy Prime Minister and the Minister of Defense (European Commission 2011, 49). This showed that Croatia was taking substantive measures to fight corruption in high level concerning high public officials. The substantial progress was reported for anti-corruption measures considering that law enforcement bodies were addressing widespread corruption.
A communication from the European Commission showed that Law enforcement bodies remained very active in particular for the high-level cases. Moreover, the communication
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reported that the prevention measures were strengthened in number of preventive legal instruments (financing of political parties and electoral campaigns, the access to information and transparency in public procurement). Moreover, The State Electoral Commission and its supervisory body were further reinforced with the new rule for financing of political parties and electoral campaign that was set in 2011 with no apparent obstacles. However, the same report suggested that Croatia still lacked implementation of conflict of interest legislations concerning state-owned enterprises, and the Conflict of Interest Commission needs to start operating without delay (European Commission 2012b, 4). Communication further notes that Croatia has advanced police cooperation to fight corruption and organized crime, and the activities aimed to bring national legislation in compatibility with v to cope in future challenges of fighting corruption and organized crime within EU (European Commission 2012b, 4).
In June 30, 211, EU members decided to close accession negotiations with Croatia, it concluded a period of six year of successful negotiations that’s saw Croatia adopting and implement new laws and regulations that comply with standards of EU. The accession negotiations consisted 35 chapters that covered a range of EU policies and rules. Among others, two key areas of these chapters were successfully concluded “Judiciary and
Fundamental Rights” and “Competition Policy”. European Commission reported that Croatia implemented reforms in crucial areas on the chapter of Judiciary and Fundamental Rights related to fighting corruption and protecting fundamental rights; the judiciary independence and effectiveness was further strengthened. (European Commission 2011b, 7-8).
Several reports issued by the European Commission suggested that Croatia’s improvement in fight against corruption has shown results, moreover the closing benchmarks 5 and 6 of Chapter 23 on the European Commission report of 2011 on Chapter 23, showed that Croatia has made further advancements in fighting corruption. USKOK showed effectiveness by strengthening the specialized prosecution in matters of corruption and organized crime. The police showed more effective and the investigations and indictments for cases of high-level of corruption were growing. Moreover, in 2011 Croatia adopted improved legislation related to access of information, financing of political parties and conflict of interest, the Conflict of Interest Commission was reinforced and action plans related for anti-corruption for state-owned companies were applied (European Commission 2011c).
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After conclusion of negotiations, on December 9 2011, the Accession Treaty was signed, followed by a referendum held in January 22 2012 in Croatia, where Croatian voters voted
“Yes” with 66.27% in support for accession of Croatia in EU. The Croatian Parliament with 136 votes in favor unanimously ratified the Accession Treaty of the Republic of Croatia to the European Union, in March 9 2012, and after ratification procedures in all EU member states were concluded, Croatia officially became a member of the union in 1 July 2013.
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